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U.S. Economy Is Still Holding On

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The US economy is continuing to hold on despite the recent economic uncertainty; there have been signs of modest growth in a few sectors with others showing little to no change.

U.S. Economy Today

The U.S. economy appears to be holding strong despite fears following the Brexit referendum result last month.

The economy has shown signs of modest growth in several areas such as employment, manufacturing, and real estate.

1

• The US dollar currency index closed at 96.10, which is down 0.21 from the previous close of 96.31.

The US dollar is rising against the:
• Euro +0.21%
• Great British Pound +0.68%
• Australian Dollar +0.50%
• Japanese Yen +1.34%

2

Growth In Employment

The U.S. employment rate has been holding steady for the last few months:

3

Reports are showing that the unemployment rate has been holding steady at 254,000, which is near the 43-year low of 248,000.

This is going against the predictions set by economists who saw the unemployment figure to be nearer 265,000.

Unemployment figures have now been below 3000,000 for 71 weeks; the longest stretch recorded since 1973.

Housing Expected To Hold Steady

The housing market has shown a quarter on quarter rise of 0.6%.

4

Regionally there have been strong signs of growth in the West, Midwest, and South.

However, in the Northeast, there has been little sign of growth, which is concerning housing experts.

Overall experts predict that the housing market will slow down to a steady pace during the second half of 2016.

Stock Markets Rising High

The U.S. stock market closed high all of last week, which has pleased economists and investors, after the markets took a hit following the Brexit referendum result.

Now, the markets are showing significant signs of growth worldwide with only losses in the FTSE 100, SHCOMP, and SENSEX.

Worldwide the biggest growth is:
• FTSE MID +1.83%
• BOVESPA +1.63%
• DAX 30 +1.14%
• NIKKEI 225 +0.95%

5

Why U.S. Growth Can Be Bad News

The increase of the U.S. economy should be a good thing; however, some economists fear that the growing U.S. economy could trigger another recession.

Investors did not anticipate the U.S. economy to hold high, so therefore did not foresee the potential losses because of a continuing growing economy.

So why would U.S. economic growth trigger a recession?

Continuing growth would result in interest rates rising, and an increase in interest rates would mean an increase in borrowing.

This would disturb low-interest rate investments.

The yield curve on US treasuries has appeared in recent months, which is an indicator of an imminent recession.

If the US economy continues to soar, then this would cause the yield curve to decompress which would send shockwaves across the economy rapidly.

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How likely is it that interest rates will raise?

Neel Kashkari, Fed’s Minneapolis president, has stated that there is not likely to be any interest rate risings shortly.

Despite the economy showing signs of growth, inflation is still low, and employment rates are not full.

Kashkari said that the Fed will be patient and will allow the US economy to continue to heal before considering raising rates.

The Fed will be meeting at the end of the month; they will be paying close attention to the current growth in the job market amongst other areas to determine if the economy is heading in the right track.

Kashkari is confident that the economy will keep on to growing at a stable pace and that there will be no further recession.

He feels that their most urgent priority is getting people back into employment.

Traders are not expecting to see interests rates rise until mid-2017.

The Future Of The U.S. Economy 

The U.S. economy has proven to be resilient; however, the continual growth of the US economy depends on the job markets continuing to improve, productivity starting to strengthen, and addressing high poverty rates, and low incomes.

Despite the dollar remaining strong, oil investments are sinking as prices fell, and distress in the global financial markets, the IMF predict that the growth this year will be 2.2.

Furthermore, there are predictions that growth will continue into next year with the figure rising to 2.5.

The main risks that may weaken the economy lie with uncertainty surrounding a strong dollar, corporate production and investments, and inflation.

Other risks factors include the oil and energy industries.

 The IMF feels that the US top priorities should be:
• Increase the minimum wage and expand earned income tax
• Reform the corporate tax
• Immigration reform to skill based system
• The growth in state and federal infrastructure
• Improve nonworking social programs
• Promote family generous benefits
• Increased funding for training programs and education
• Endorse the Trans-Pacific Partnership

Conclusion

Despite the recent unrest and uncertainty recently both inside and outside the U.S., the economy has proven to be resilient and has continued to hold strong and show signs of improvement.

The employment and housing markets have continued to show signs of slow and steady growth, with indications that this trend will continue throughout the rest of 2016.

The stock market has shown incredible resistance to the current economic mood and closed high all of last week, despite the sudden dip after the result of the UK EU membership referendum.

The global stock markets also show signs of growth with only the FTSE 100, SHCOMP, and SENSEX showing decline.

There is fear that continued growth could spark another recession if the economy increases too quickly.

If interest rates were to rise too soon then, this could trigger a series of events that could cause the economy to collapse and fall into recession.

Neel Kashkari, of the Fed, has stated that the Fed is in no hurry to increase interest rates anytime soon.

The Fed wants to allow the economy to heal itself.

They will not raise interest rates until inflation and employment rates improve.

Continual economic growth will rely on several areas being developed along with avoiding potential risks which may affect growth.

The IMF has predicted that growth will continue into 2017, and they have issues several priorities, on which the US economy should focus.

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Economy

STUDY: Number of Billionaires Doubles in Last Decade

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Number of Billionaires Doubles in Last Decade
Image via Shutterstock

The number of billionaires has doubled in the past decade and the world’s wealthiest 2,153 people controlled more money than the poorest 4.6 billion combined last year, the charity Oxfam said Monday.

Meanwhile, unpaid or underpaid work by women and girls adds three times more to the world’s economy each year at least $10.8 trillion than the technology industry, the Nairobi-based charity said in its “Time to Care” report.

Women around the world work 12.5 billion hours combined each day without any pay or recognition, while the world’s 22 richest men have more wealth than all the women in Africa.

“It is important for us to underscore that the hidden engine of the economy that we see is really the unpaid care work of women. And that needs to change,” Amitabh Behar, CEO of Oxfam India, told Reuters.

“Our broken economies are lining the pockets of billionaires and big business at the expense of ordinary men and women. No wonder people are starting to question whether billionaires should even exist,” Behar said ahead of the annual World Economic Forum in Davos, where he will represent Oxfam beginning Tuesday.

“Women and girls are among those who benefit least from today’s economic system,” he added.

There will be at least 119 billionaires worth about $500 billion attending Davos this year, according to Bloomberg, with the highest contingents coming from the US, India and Russia.

“The very top of the economic pyramid sees trillions of dollars of wealth in the hands of a very small group of people, predominantly men,” the Oxfam report said.

“Their wealth is already extreme, and our broken economy concentrates more and more wealth into these few hands,” it said.

To highlight the inequality, Behar cited the case of a woman called Buchu Devi in India who spends up to 17 hours a day walking almost two miles to fetch water, cooking, preparing her kids for school and working in a poorly paid job.

“And on the one hand you see the billionaires who are all assembling at Davos with their personal planes, personal jets, super rich lifestyles,” he said.

“This Buchu Devi is not one person. I in India encounter these women on a daily basis, and this is the story across the world. We need to change this, and certainly end this billionaire boom.”

Behar said that to remedy the problem, governments should make sure above all that the rich pay their taxes, which should be used to pay for amenities such as clean water, health care and better schools.

“If you just look around the world, more than 30 countries are seeing protests. People are on the street and what are they saying? That they are not to accept this inequality, they are not going to live with these kind of conditions,” he said.

Source: New York Post
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(c) 2020 2019 Vanguard Media Limited, Nigeria Provided by SyndiGate Media Inc. (Syndigate.info).

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Automobiles

Pump Prices to Edge up After Attack on Iranian General, but Long-Term Effect Unclear

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By Jeff Ostrowski, The Palm Beach Post, Fla.

Motorists soon will see the effects of President Donald Trump’s decision to kill a prominent Iranian general. Whether pump prices rise a little or a lot depends on how quickly international tensions intensify.

Florida gas prices climbed an average of 7 cents a gallon in the past three days and could increase an additional 5 cents, AAA – The Auto Club Group said Monday.

The 7-cent increase was coming even before the U.S. air strike Thursday that killed Iranian Maj. Gen. Qassem Soleimani. That hike was a result of a rise in the price of crude oil in December.

News of the targeted killing of Soleimani sent crude oil surging nearly $2 per barrel on Friday. An increase of that magnitude typically translates to a 5-cent hike at the pump, AAA said.

The U.S. benchmark for crude oil traded Monday just above $63 per barrel, the highest level since May 2019. The price of oil makes up about half the price of a gallon of gas.

“What happens in the Middle East can have a direct impact on Americans’ daily lives by influencing what they pay at the pump,” said AAA spokesman Mark Jenkins. “Crude prices rise when there’s a threat of war, because of concerns over how the conflict could hamper supply and demand.”

Oil analyst Tom Kloza of energy firm OPIS agreed that pump prices in Florida likely will rise about 5 cents a gallon in the coming days.

“Then I have a hunch that things are going to calm down,” Kloza said Monday. “I don’t think we’re looking at $3 gas.”

The national average pump price Sunday was $2.585, while the Florida average was $2.526, AAA said.

Kloza expects only modest increases in part because of the timing of the attack. January is always a slow month for gas consumption in the United States.

There’s also the reality that sanctions leave Iran unable to export oil. Complicating the calculus is Iraq’s response to the U.S. attack. The drone strike on Soleimani took place in Baghdad, and some Iraqi politicians considered the assault an affront to Iraqi sovereignty.

While there’s no Iranian oil supply to be disrupted by a war, Iraq is an important producer.

Trump keenly watches oil prices and realizes that a price spike might erode his support in this year’s presidential election, Kloza said.

At the same time, Kloza added, “This president has proven to be unpredictable.”

Trump’s response has been typically uneven. Delivering an official statement at the Mar-a-Lago Club in Palm Beach, Trump’s tone was measured. He said the targeted killing was designed to pre-empt Soleimani’s planned attacks on American diplomats and soldiers.

“We took action last night to stop a war,” Trump said Friday. “We did not take action to start a war.”

However, over the weekend, Trump took to Twitter to threaten attacks on Iranian cultural sites.

“The United States just spent Two Trillion Dollars on Military Equipment,” Trump wrote Sunday on Twitter. “We are the biggest and by far the BEST in the World! If Iran attacks an American Base, or any American, we will be sending some of that brand new beautiful equipment their way…and without hesitation!”

##IFRAME_1##Iran has vowed vengeance, but military experts say the nation isn’t powerful enough to wage a direct war against the U.S.

“It’s still far too early to know how much of an impact this conflict will have overall on prices at the pump,” AAA’s Jenkins said.

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Economy

Stocks Rally Despite Impeachment News

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Stocks rose on Thursday as investors looked past the news of President Donald Trump’s impeachment as well as mixed U.S. economic data.

The Dow Jones Industrials advanced 53.85 points to begin trading at 28.293.13

The S&P 500 recovered 4.93 points to 3,196.07

The NASDAQ added 19.39 points to Wednesday’s all-time record, at 8,847.12.

The S&P 500 is up nearly 7% since House Speaker Nancy Pelosi launched a formal impeachment inquiry in September.

Cisco Systems was the best-performing Dow component, rising 1.6%. The consumer staples and real estate sectors led the S&P 500 higher, gaining 0.4% each. Micron Technology shares also contributed to Thursday’s move higher. Conagra shares surged more than 14% and were on pace for their biggest one-day gain since Oct. 16, 1989.

Micron shares climbed 3.5% on the back of strong quarterly results. The chipmaker posted earnings per share and revenue that topped analyst expectations.

On the economic data front, weekly jobless claims fell to 234,000 from 252,000 the week before. However, economists expected claims to fall to 225,000.

Meanwhile, the Philadelphia Federal Reserve’s business conditions index fell to 0.3 in December from 10.4 in the previous month. Economists expected the index to slip to 8.

The Democrat-led House of Representatives voted Wednesday to impeach Trump for abuse of power and obstruction of Congress. Trump became only the third president to be charged with high crimes and misdemeanors and will now face a trial in the Republican-controlled Senate.

Prices for the 10-Year U.S. Treasury were lower, raising yields to 1.94% from Wednesday’s 1.93%. Treasury prices and yields move in opposite directions.

Oil prices gained seven cents to $61.00 U.S. a barrel.

Gold prices moved forward $1.80 at $1,480.50 U.S. an ounce. Copyright © 2019 Baystreet.ca Media Corp. All rights reserved.

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